The report shows originations are projected to see a boost from the extension and enhancement of the Home Affordable Refinance Program (HARP) and the extremely low fixed-rate mortgage rates that currently prevail in the market.

Outlook Highlights

Domestic aggregate demand (consumers and businesses), rose 3.6 percent annualized during the third quarter, the second biggest quarterly gain in five years.

Non-residential fixed investment (buildings, equipment and software) expanded at a striking 14 percent pace during the third quarter; residential investment also rose a little bit for the second straight quarter.

The Freddie Mac House Price Index for the U.S. has recorded a 25 percent cumulative decline since the peak in mid-2006 through September 2011.

Ten-year Treasury yields continue to hover in a narrow band around 2.0 percent, while 30-year conforming fixed-rate mortgages have averaged about 4.0 percent in recent weeks.

The effect of the extended and enhanced HARP on single-family originations, assuming about $200,000 loan amount on average, is likely to be around $200 billion to $300 billion over 2012 and 2013, with most of the additional volume falling in the first year.